361 DEGREES INTERNATIONAL : ° revenue remained largely stable in 2018 Rebranding initiative poised to strengthen the brand and usher in a new phase

[For Immediate Release]

361 Degrees International Limited 361 度國際有限公司

(incorporated in the Cayman Islands with limited liability)

361˚ revenue remained largely stable in 2018 Rebranding initiative poised to strengthen the brand and usher in a new phase

(15 March 2019 - Hong Kong) - The official partner of the 2018 Jakarta Palembang Asian Games and the leading sportswear brand enterprise in China, 361 Degrees International Limited ("361˚" or the "Company", together with its subsidiaries, the "Group"; HKSE stock code: 1361), is pleased to announce its results for the year ended 31 December 2018.

Operational highlights

•  Riding on the trend of Asian Games to open up new market in Indonesia, setting up new sales channels to nurture new growth drivers

•  Award-winning running shoes of world-class design as the first phase of rebranding, underpinning the internationalization and rejuvenation strategy

•  Kids wear product featuring Universal Studio IP delivered excellent results and further expanded sales and market share

•  Steady growth in E-commerce with online and offline integration to drive new retail

Financial highlights

•  Revenue remained steady at RMB5,187.4 million

•  Gross profit margin edged down 1.2ppts to 40.6%

•  Net profit was RMB303.7 million

•  Cash and cash equivalents (including bank deposits and cash in hands, and fixed deposits with original maturities not exceeding three months) amounted to RMB1,651.3 million

Financial Analysis

During the year under review, the Group's revenue rose 0.6% year-on-year to RMB5,187.4 million (2017: RMB5,158.2 million). The relatively flat revenue was mainly due to the fewer replenishment orders resulted from conservative consumer sentiment amid the uncertainty arising from the Sino-US trade negotiation in the second half of the year, and the revised delivery schedule resulted from the Group's Logistics Optimization Program implemented in 2018. In particular, revenue contribution from the footwear segment accounted for 42.7%; apparel sales accounted for 38.5% of the Group's revenue. Revenue of 361° Kids continued its strong momentum and grew by 14.7% to RMB816.0 million (2017: RMB711.1 million), representing 15.7% of the Group's revenue. The web-exclusive products sales of E-commerce business increased by 85.3% to RMB739.2 million (2017: RMB399.0 million), contributing to 14.3% of the Group's revenue during the year under review.

The gross profit in 2018 amounted to RMB2,105.9 million (2017: RMB2,156.4 million) while gross margin adjusted to 40.6%. Profit attributable to the equity shareholders was RMB303.7 million (2017: RMB456.7 million), equivalent to basic earnings per share of RMB14.7 cents (2017: RMB22.1 cents). Net cash generated from operating activities was RMB295.0 million (2017: RMB831.5 million). Cash and cash equivalents (including bank deposits and cash in hands, and fixed deposits with original maturities not exceeding three months) amounted to RMB1,651.3 million. Trade and bills receivables turnover days increased by 5 days to 160 days. The overall working capital turnover days were adjusted upward by 15 days to 75 days.

In view of the performance and retaining funds for future development, the Board does not recommend the payment of final dividends.

Operational Highlights

Partnership with Asian Games to explore new markets, channels and impetus

During the year under review, the Company sponsored the largest comprehensive sports event in Asia, i.e. 2018 Jakarta Asian Games, providing Olympic Council of Asia with the full set of sporting equipment, including various sportswear, functional sports footwear and sports accessories. The event was broadcasted to around four billion people in Asia with many of the Group's endorsers achieved outstanding performance. For example, Mr. Sun Yang won all four gold medals from competitions ranging from Men's 200 to 1,500-meters freestyle in swimming. While bringing glory to the nation, they contributed to further improving the Group's brand awareness and sales performance. Through sponsoring 2018 Jakarta Palembang Asian Games, the Group successfully entered the Indonesian market, receiving both attention and recognition from media, peers and the market.

Meanwhile, capturing the opportunity from the Asian Games, the Group opened up the Indonesian market and entered into a strategic cooperation agreement with Matahari, the biggest department store with over 70 years of experience and 155 stores in 73 cities across Indonesia. The 361º products are currently available for sale in three exclusive stores and 38 shop-in-shop outlets. The cooperation helped develop new sales channels as well as growth drivers along the Belt and Road countries.

Internationalization and rejuvenation strategy along with award-winning running shoes support rebranding plan

The Group received worldwide professional recognition for the design and technology of running products. SPIRE 3, 361° cushioned shoes, won the ISPO Global Design Award in Munich, Germany in February 2018, and the Running Products Award 2018 and Newcomer Shoe of the Year awarded by The Nordic Edition in May 2018. On 26 December 2018, 361° and STAPLE DESIGN co-launched M1° RO, a colourful and freedom-themed series which flashes a fascinating mix of outstanding performance with avant-garde design. Impressing consumers with the visual effects of "emerging from the shell", the product delivered a brand-new image and experience different from the past, serving as the full-scale kick-off of the rebranding plan.

As early as four years ago, 361° began to build an overseas technology platform and completed a series of technical reserves. As the established overseas technology platform will be integrated with the domestic supply chain in 2019, a series of cost-effective products will be offered to mainstream consumers so as to tap into the unserved market.

Kids wear crossover products featuring IP raised brand value Sales growth recognised by capital market

In 2018, 361° Kids and Universal Studios entered into a cooperation agreement and co-launched a series of kids wear products featuring the animations of DreamWorks and Jurassic World, marking the Group as the first Chinese sports brand to launch products of its kind. For the four trade fairs in 2018-2019, satisfactory growth have been recorded in terms of the number of kids wear orders, which locked in the future revenue growth for the segment. In the review year, 361º Kids contributed to 15.7% of the Group's revenue, which represented a year-on-year growth of 14.7%.

In November 2018, the Group signed an agreement with an independent third party by an investment of RMB500 million for the development of the kids wear business in the future. As a core business segment of the Group, the kids business segment has been striving to establish a loyal consumer base. The valuation of the Group's kids wear brand was widely recognised by the market and the kids wear business segment is expected to maintain its rapid growth momentum in the future.

Explosive growth in E-commerce thanks to online and offline integration towards New Retail

The revenue from the sales of web-exclusive products of E-commerce business increased significantly by 85.3%, accounting for approximately 14.3% of the total revenue for the year under review which demonstrated online retail as another consumption growth driver in China. Driven by the upgrade and change in the consumption preference and pattern of young consumers, the Group strived to integrate online and offline sales channels in order to create multi-pronged profit-oriented supply mechanism and frequently introduce products with premium pricing potential.

Prospect

The year 2019 marks the milestone of the Group's 10th anniversary of its listing on the Hong Kong Stock Exchange. The Group will carry on its established strategy and further the development in 2019, while staying focused on its multi-brand advantages and continuing to fully utilize its own resources and leading technologies for the innovation and research and development of products to enhance the quality of products and services, and to focus on developing the value of its core brands with precision marketing. It will also join hands with influential large-scale competition and event organizers, with the aim of increasing the exposure of the Group's brands and products, and laying a solid foundation for the rebranding initiative.

The Group is planning to unveil its new brand image and strategic direction in due course and promote the upgrading and rebuilding of its brands, thereby getting a head start in the consumption grade of sporting goods, bringing about new impetus to the sustainable and healthy development of the Group's business. The new 361º brand will exhibit three characteristics, namely, differentiation, relevance and uniqueness, standing out as a mixture of inheritances and breakthroughs. The new brand will not only distinguish itself from other brands in the market but will also inherit the good assets correlated to the industry that is attached to the 361º brand, and establish a distinctive brand image for the Group. In addition to the major brands, the Group will at the same time promote the remodelling of the ONE WAY brand to seize opportunities arising from the winter sports consumption market. The Group plans to strengthen the upgrading and rebuilding of the ONE WAY brand and related businesses in 2019 onward. It will be repositioned as a premium brand and emerge as a premium and professional sportswear brand originated from Northern Europe for Chinese consumers.

Mr. Ding Wuhao, President of 361˚ Group concludes, "To become a century-old brand and a respectable world-class sportswear company is the long-term vision of the Group. The Group's successful collaboration with the 2018 Asian Games once again earned worldwide recognition by the industry and achieved fruitful results in raising brand awareness and market expansion. In 2019, while maintaining sustainable growth in business, we will launch the rebranding initiative. We focus on mapping out the development directions in the long run, rather than just exploring the short-term revenue streams. While moving towards internationalization and rejuvenation, the Group hopes to create a new brand image, and build up a loyal clientele. Riding on the rapid growth of the kids wear segment, we expect the consumers of the kids wear products will become the major customers of the core brand in five to ten years. From 2019 onwards, the effects of the rebranding initiative will be gradually reflected in all aspects, paving the way for better business performance and brighter prospects.

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About 361 Degrees International Limited

Established in 2003, 361˚ is a leading sportswear brand enterprise in China with a growing international presence. The Group designs, develops, manufactures and sells functional, innovative and stylish sportswear products to cater to the active, athletic and casual sportswear needs of adults, young adults and children. The Group offers high-performance and value-for-money footwear, apparel, and accessories products targeted at mass market.

The Group operates a distributorship business model through 31 exclusive distributors and approximately 1,600 authorized retailers to manage an extensive distribution network of approximately 7,000 retail stores across China. It has established a leading position in third-tier and lower-tier cities in China.

For more details, please refer to its website:www.361sport.com

For further information, please contact:

361 Degrees International Limited Ms. Nina Zhan

Vice-President, Investor Relations 361 Degrees International Limited Email:[e-mail]

iPR Ogilvy & Mather

Tina Law / Lorraine Luk / Karl Cheung / Gigi Cheung

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